10. Suppose that the manager of a firm operating in a competitive market has estimated the firm’s average variable cost function to be AVC 10 0.03Q 0.00005Q2 Total fixed cost is $600.

a. What is the corresponding marginal cost function?

b. At what output is AVC at its minimum?

c. What is the minimum value for AVC?

If the forecasted price of the firm’s output is $10 per unit:

d. How much output will the firm produce in the short run?

e. How much profit (loss) will the firm earn?
If the forecasted price is $7 per unit:

f. How much output will the firm produce in the short run?
g. How much profit (loss) will the firm earn?
If the forecasted price is $5 per unit:
h. How much output will the firm produce in the short run?
i. How much profit (loss) will the firm earn?